Kohlberg Kravis Roberts & Co., the world's largest buyout firm, is planning an initial public offering of Alea Group Holdings that may raise ?150 million ($254 million) for the reinsurer, people familiar with the company said.

KKR invested about $380 million in cash in Bermuda-based Alea, and is unlikely to sell any of its shares in the sale, said the people, who asked not to be identified. KKR is selling new shares in the business six years after backing a management buyout of Alea, formerly known as Rhine Re.

Alea's management is in London.

Alea last year more than doubled the value of net premiums to $708 million.

Under chairman and chief executive Dennis Purkiss, who joined as part of a new management team in 2000, Alea has exited unprofitable businesses and focused on expanding in the U.S., which accounts for about half of gross premiums.The company, which ranks 31st by premiums among global reinsurers, "wants to become a bigger player,'' said Simon Marshall, a credit rating analyst at Standard & Poor's in London.

Rising premiums have made it easier for reinsurers to raise capital, enabling them to underwrite more business.

Bermuda-based reinsurer Endurance Specialty Holdings Ltd. in February raised $220.8 million in an IPO on New York Stock Exchange. Montpelier Re Holdings Ltd. raised $190 million in an October sale.Order Taking Alea has been under pressure from ratings companies to raise capital to fund its business. A.M. Best Co., an insurance rating company which rates Alea A-, had said it may cut the rating if Alea failed to secure additional capital to finance growth. Standard & Poor's rates Alea A-, two notches below Munich Re, the world's largest reinsurer. Alea was rated BBB- by S&P in 2001.Goldman Sachs Group Inc. and Merrill Lynch & Co., which are managing Alea's IPO, on Monday began canvassing investor interest for the offering. Order-taking is set to run from early to mid-November, the people said.

Stephen Cane, executive vice-president of Alea, declined to comment, as did Goldman spokesman Simon Eaton, Merrill Lynch spokeswoman Vanessa Orr and KKR spokeswoman Gay Collins.